Grant's Current Yield Podcast

→ WHAT IT COVERS Dan Zwirn of Arena Investors explains how monetary and fiscal policy since 2013 created massive asset bubbles now slowly deflating through obscured losses. Financial innovation delays price discovery across private credit, real estate, and insurance sectors, with losses incurred but not recognized stretching over ten to twenty years.

→ WHAT IT COVERS Dean Kernat of MacroRisk Advisors discusses Federal Reserve transparency creating volatility suppression, mispriced options in S&P 500 and gold, declining correlation premiums, and potential US Treasury market crisis risks from unsustainable debt dynamics. → KEY INSIGHTS - **Fed Transparency Risk:** Federal Reserve's shift from Greenspan's purposeful obfuscation to Powell's detailed forward guidance creates short volatility trades and carry strategies that paradoxically...

→ WHAT IT COVERS Michael Haines of BeachPoint Capital discusses the deteriorating health of private credit markets, where 20-30% of borrowers cannot cover debt service, predatory liability management exercises exploit weak loan documents, and restructuring activity masks true default rates. → KEY INSIGHTS - **Interest Coverage Crisis:** Twenty to thirty percent of private credit borrowers currently fail to cover debt service payments, up from single digits three years ago, driven by high...

→ WHAT IT COVERS Bankruptcy lawyer James Scraegan discusses liability management exercises, private equity vulnerabilities, Trump's negotiating tactics, and restructuring opportunities as interest rates remain elevated while 29,000 private equity portfolio companies face liquidity challenges. → KEY INSIGHTS - **Interest Rate Impact:** Companies leveraged at six times EBITDA in 2021 when SOFR was 0.05% now face SOFR at 4.

→ WHAT IT COVERS Matt McLennan from First Eagle Investment Management discusses value investing strategy during market volatility, focusing on identifying businesses with scarce market positions, diversification across geographies, and using gold as portfolio ballast amid fiscal uncertainty. → KEY INSIGHTS - **Price-Guided Selection:** Target businesses trading at 5-7% unlevered free cash flow yields with durable market positions, avoiding payment for growth assumptions.

→ WHAT IT COVERS Seth Wiseman discusses commercial real estate crisis dynamics, focusing on office building delinquencies exceeding Great Recession levels, multifamily loan stress from rate increases, and private credit opportunities emerging from bank retreat and regulatory pressures. → KEY INSIGHTS - **Office CMBS Delinquencies:** Office building delinquency rates now exceed Great Recession peaks due to remote work reducing space demand by 50% while supply remains constant, creating...

→ WHAT IT COVERS David Dredge of Convex Strategies explains his volatility hedging approach, identifying major global imbalances in Japan, China, and Europe while discussing current opportunities in FX volatility and the parallels between today's market and the mid-1990s period. → KEY INSIGHTS - **FX Volatility Opportunity:** Euro-related FX volatility reached 2021-level cheapness in 2024, particularly in euro crosses like euro-sterling and euro-Swiss, offering hedging opportunities before...

→ WHAT IT COVERS Carrie Findlay, founder of Tekora asset lending, discusses charging 17-21% interest rates to venture-backed startups, predicting commercial real estate will trigger the next credit crisis, and maintaining strict lending covenants despite industry trends. → KEY INSIGHTS - **Asset-Based Lending Rates:** Tekora charges 17-21% interest to first-time entrepreneurs and venture-backed companies, not because borrowers face bankruptcy, but because they lack traditional banking...

→ WHAT IT COVERS Christopher Whalen examines the Federal Reserve's $217 billion negative remittance position, deteriorating Treasury market infrastructure, bank balance sheet problems from low-yielding securities purchased during COVID, and parallels to pre-1900 monetary chaos. → KEY INSIGHTS - **Federal Reserve Insolvency:** The Fed holds $44 billion in capital against a $6 trillion balance sheet while carrying negative $217 billion in deferred remittances to Treasury, paying 4.

→ WHAT IT COVERS Jim Grant and Steve Bogdan analyze America's declining defense industrial capacity versus China's shipbuilding dominance, exploring implications for capital markets, interest rates, and the shift from intangible to tangible capital investment amid rising geopolitical tensions. → KEY INSIGHTS - **Defense Industrial Atrophy:** US shipyards service fewer than 200 vessels versus China's 7,000-plus capacity, with 40% of American submarine fleet currently out of service due to...